Friday, August 08, 2008

LeBron, Kobe, Europe and the NBA's Future

Just testing a theory: So there's the LeBron/$50M/Greece meme. Now the Kobe/$50M/Italy meme (and a lot more plausible). It's not a joke; the idea of a true NBA superstar bolting for Europe (or China) WILL become a reality in the next few years. And the current NBA salary structure can't deal with it.

I wonder if the NBA will be forced to adopt an MLS-style "Beckham Rule," where one player (presumably the superstar) can be signed for any amount of money and would not count against the team's cap. (Or, alternatively, allowing for players to become part-owners.)

Sure, that favors the free-spending NBA owners and it blows the economics of salary management right out of the water, but it beats watching the stars not play in the NBA at all, right? Your reactions via the Comments.

5 comments:

If LeBron and Kobe cross the pond to play overseas you'll see one of two options, NBA expansion to foreign markets or the abolishment of the NBA Salary cap. I hope neither has to happen because if we lose the cap we'll see nothing but the large market teams in the finals. Unlike baseball small market teams would have no chance against teams from large market teams, in basketball it would be much easier to buy a championship than it is in baseball.

I would not expect many European or Russian teams to spend that absurd amount of money on one player. If one or two teams decide the allure of the player and a potential championship are worth the commitment then perhaps a few players will choose to make the move. However, a mass exodus of top talent is unlikely. In addition, I would expect to see changes in the current contract system that would eliminate to ability of restricted free agents to jump to Europe instead of signing one year deals.

Before we conclude that only two options are likely, someone (not me) would need to determine how many potential foreign teams have the ability to spend and likely loose that amount of money per year. While the initial shock may result in international intrigue, subsequent moves would probably be met with significantly less fan-fare, which would also mean less publicity and ultimately less income. While European expansion is certainly possible, it would have no affect on the central issue as European NBA teams would still operate under the NBA cap. In fact, it could exacerbate the problem by introducing NBA players to Europe. This could make future players much more comfortable with the idea of playing for non-NBA European franchises. In addition, would the European NBA players be paid in Euros? Will the cap be based on the American dollar? There is a potential for some NBA franchises to have a marked advantage over other NBA franchises as a result of the economic conditions of the specific country or nation in which the team is based. The only real option is to weather the storm and adjust accordingly. On a slightly unrelated note, one good thing that would come from the elimination of the salary cap would be the removal of the god-awful matching salaries requirement for trades.

A European team offering a player of James' caliber an equity stake in their team or outside business interests doesn't carry as many variables as an NBA team doing the same thing.

For one, I don't think James or anyone else that could potentially sign a large contract in Europe would elect to stay in Europe. Mainly because the league is relatively weak and the NBA is still the pinnacle of basketball. A two or three-year contract in exchange for an ownership stake in that team or that owners business interests is basically the same as renting that player for a few seasons.

It's still a good investment for the player and the European owner if that player chooses to return to the States.

But NBA teams would have to start signing players to career binding contracts if they offered ownership percentages. Imagine LeBron owning 5% of the Cavs and then deciding he wanted to play for the Knicks. There would be conflicting interests and it would open a huge can of worms.

I do think the NBA will be forced to reevaluate the salary cap and luxury tax. Both of those provisions were implemented to ensure competitive balance. One could argue that they've accomplished little in those efforts. The big market teams are still able to spend more than small market teams, and the biggest names in the NBA still want to play in the largest media markets.

Connect With Me

Quickish

About This Blog

DanShanoff.com is a sports-blog spin-off of my long-time ESPN.com column, "The Daily Quickie." Anchored by an early-morning post of must-know topics, the blog is updated frequently throughout the day with new posts and user comments.